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Employers must keep employment agreements for all staff

Employment-related issues and employment fraud are two common concerns among new migrants, and a new law change goes a step further to protect employees’ rights.

Employers in New Zealand are legally required to have a written employment agreement for every employee.

The law now requires every employer to keep a signed copy of employment agreement or current terms and conditions for all their staff, says the New Zealand Department of Labour.

The law, which came into effect from 1 July 2011, has provision for penalty for non-compliant employers.

The law has retrospective effect to include existing employees. “Employment agreements are required for all employees no matter when they started work,” says Annie Newman, the Department’s Acting Chief Adviser of Employment Relations.

“This affects all employees including those hired on a verbal agreement or employees who do not have current written agreements in place,” says Ms Newman.

The law is expected to improve clarity in employment relationships. “Having a clearly written employment agreement helps reduce the risk of misunderstandings and there are some provisions that must be included in employment agreements,’’ she says.

They must include the name of the employer and employee, a description of the work to be performed, the place of employment, times the employee is to work, the wages or salary, and an explanation of services available for solving problems.

The law puts the responsibility of compliance on employers. “It’s the employer’s responsibility to maintain and keep an up to date copy of each employee’s agreement and provide a copy of the agreement if an employee requests it,” Ms Newman says.

The Department of Labour has developed an Employment Agreement Builder to help employers through this process.

Failure to ensure an employment agreement is in place for all employees may result in a labour inspector taking a penalty action against an employer. This involves a seven-day notice period to rectify the breach and if this isn’t complied with then penalties may be sought in the Employment Relations Authority of up to $10,000 for individuals and $20,000 for companies.

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